Obama: U.S. can't "cut our way to prosperity"

June 25 - In his weekly address U.S. President Obama pledged to tackle the US debt issue but warned, ''we can't simply cut our way to prosperity.'' Deborah Lutterbeck reports.

▲ Hide Transcript

▶ View Transcript

U.S. President Barack Obama in his weekly address pledges to work with Congress to solve the government's debt problem, but warns that the focus must extend beyond spending cuts.
Debt talks on Capitol Hill broke down earlier in the week when Republicans balked at proposed tax hikes.
SOUNDBITE: U.S. President Barack Obama, saying (English):
"Even though we've turned our economy in the right direction over the past couple of years, many Americans are still hurting, and now is the time to focus on nation building here at home. Of course, there's been a real debate about where to invest and where to cut, and I'm committed to working with members of both parties to cut our deficits and debt. But we can't simply cut our way to prosperity."
Obama is expected to meet with Congressional leaders on Monday.
Lawmakers have been working to hash out a deal to lower budget deficits and raise the U.S. debt limit.
The Treasury Department has said it will run out of money to pay the country's bills on August 2nd ---if Congress does not raise the $14.3 trillion debt ceiling. Analysts say a default could send markets plunging around the world and raise the risk of another recession in the U.S..
Deborah Lutterbeck, Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products: